How the 537 IST Works
A comprehensive guide to deferring 100% of capital gains taxes on your FedEx route sale through the 537 Installment Sale Trust
The Complete Process
Five proven steps to a tax-deferred route sale
Calculate Your Tax Savings
Use our calculator to see exactly how much you'll save. Input your expected sale price, route count, and years owned to get an instant comparison between traditional sale taxes and 537 IST deferral.
- Instant tax impact analysis based on your specific situation
- Federal capital gains, NIIT, depreciation recapture, and state tax breakdown
- Projected quarterly income from trust investments
Schedule Expert Consultation
Meet with our 537 IST specialists who have helped hundreds of FedEx contractors successfully defer taxes. We'll review your calculation results and answer all your questions.
- 30-minute strategy session with no obligation
- Review your specific tax situation and sale timeline
- Get answers about the trust setup and administration process
Establish Your 537 IST
We handle all the legal documentation and trust establishment before your sale closes. The trust must be in place before the sale transaction completes.
- Complete trust documentation prepared by experienced attorneys
- IRS Section 453 installment sale structure properly configured
- Trust funded and operational before sale closing date
Complete Your Route Sale
Sell your routes with the trust as the buyer. The sale proceeds go directly into the trust, deferring 100% of capital gains taxes that would have been due immediately.
- Trust purchases routes as installment buyer per IRC Section 453
- No capital gains taxes triggered at closing (unlike traditional sales)
- Clean transfer of routes to final buyer through trust structure
Receive Tax-Deferred Income
Your sale proceeds are invested by professional money managers. You receive quarterly distributions with taxes deferred until you actually receive the money.
- Professional asset management with conservative, income-focused strategies
- Quarterly distributions provide steady retirement income stream
- Pay taxes only on distributions received, not the full sale amount
Traditional Sale vs 537 IST
See the dramatic difference in how much you keep
Traditional Sale
Pay Taxes Immediately
- ✕Lose $626,000 to immediate taxes
- ✕Must reinvest smaller amount
- ✕Lower long-term wealth potential
537 IST Sale
Defer 100% of Taxes
- Keep 100% of sale proceeds working for you
- Steady quarterly income stream
- Pay taxes only on distributions received
Investment Strategy Options
Professional money management tailored to your goals
Conservative Income
6% target return
- Lower volatility
- Ideal for near-retirement
Balanced Growth
8-10% target return
- Moderate volatility
- Most popular choice
Growth Focused
9-15% target return
- Higher volatility
- 10+ year time horizon
Professional Asset Management
All investment strategies are managed by experienced fiduciary money managers who specialize in 537 IST portfolios. Quarterly rebalancing ensures your portfolio stays aligned with your risk tolerance and income needs.
FedEx Route Specific Considerations
Why 537 IST is ideal for FedEx contractors
High Asset Value Sales
FedEx routes often sell for $500K to $5M+. Traditional sales at these values trigger massive tax bills ($125K to $1.25M+). The 537 IST is specifically designed for high-value asset sales where tax deferral creates significant wealth preservation.
Depreciation Recapture
FedEx contractors typically claim significant depreciation on vehicles and equipment. This creates depreciation recapture taxes (taxed at ordinary income rates up to 37%) on top of capital gains. The 537 IST defers both capital gains AND recapture taxes.
Retirement Transition
Many FedEx contractors sell routes as retirement strategy. The 537 IST provides steady quarterly income to replace route profits, without the 60-80 hour work weeks. Your sale proceeds continue generating income with professional management.
State Tax Considerations
FedEx contractors in high-tax states (CA, NY, NJ, etc.) face combined federal + state taxes exceeding 35%. The 537 IST defers both federal AND state taxes. Some contractors even relocate to no-income-tax states before taking distributions, further reducing lifetime tax burden.
Legal Foundation & Compliance
Time-tested tax strategy backed by decades of IRS precedent
IRC Section 453: Installment Sales
The 537 Installment Sale Trust is based on Internal Revenue Code Section 453, which has governed installment sale taxation since 1921. This section explicitly allows taxpayers to defer capital gains taxes when receiving payments over multiple years instead of in a lump sum.
100+ Years of Precedent
IRC Section 453 established in 1921, validated by thousands of tax court rulings
IRS Revenue Rulings
Multiple revenue rulings confirm installment sale trust structures are compliant
Trust Requirements & Safeguards
Independent Trustee Requirement
Federal law requires an independent, third-party trustee to ensure compliance and protect your interests. You cannot serve as your own trustee.
Professional Documentation
Trust agreements prepared by attorneys specializing in tax law and installment sales, reviewed for compliance with current IRS regulations.
Annual Tax Reporting
Form 6252 (Installment Sale Income) filed annually to report distributions and deferred gains. Full compliance with IRS reporting requirements.
Asset Protection
Properly structured trusts provide creditor protection and estate planning benefits beyond tax deferral.
